But she told a council meeting on Tuesday those dreams could come crashing after discovering the block in the Belmont Estate in Theatre Drive wasn’t zoned residential.

“We only realised the mistake when the building contractor lodged the plans to the council,” Ms Callaghan said.

Council planners advised the land was zoned B6 Enterprise, for commercial use, and that residential was expressly prohibited.

Yet the blocks, occupying the former drive-in site off Lansdowne Street, were marketed as residential, according to buyers.

The developer has rejected any wrongdoing.

“We (with business partner Bruce Makin) sold the land in a very legal way,” Herb Schuster said.

“I would never ever do anything wrong. It was my belief we had approval for residential.”

Ms Callaghan said construction was to have started a year ago on her house but with numerous subdivision delays and now the zoning revelation, it was placing great financial strain.

“We are now paying a mortgage on a block zoned commercial and renting indefinitely,” she told councillors.

Their builder had informed them he could not hold the locked-in rate unless they gave a firm direction by December 21. The couple faced a $40,000 price hike.

Ms Callaghan requested the council bring forward a rezoning decision to give owners certainty.

She wasn’t the only one. Ashley Yeadon said his parents paid a deposit on a block in 2017. They were hoping to move to flatter land from hilly Eastgrove to better accommodate Ashley’s wheelchair-bound father. But last Friday they were advised their development application had been rejected due to the zoning.

“My main concern is they’ve purchased a block that is basically worth nothing at this point...,” he said.

“How did we get to this point?”

Council general manager Warwick Bennett said his planners hadn’t erred before issuing the subdivision certificate, as speakers had speculated.

The subdivision was registered in August, 2018.

“The question has been asked how the subdivision certificate was released without the land being rezoned. The simple answer is it was compliant with the B6 zone subdivision requirements,” Mr Bennett said.

“It’s unfortunate that between conveyancing and signing of building contracts the clients haven’t been informed through their Section 10.7 (planning) certificates that dwellings are expressly prohibited.”

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Old drive-in site’s ticket to develop

In response to Mr Yeadon’s question about giving in principle approval for the homes at this stage, Mr Bennett said the council could not legally approve DAs that didn’t have the relevant zoning.

He told the meeting that criticism of the council was “unfairly targeted” and instead, serious questions should be asked of conveyancers and solicitors who he believed hadn’t issued clients with appropriate advice that houses were prohibited in the B6 zone.  

Mr Bennett told The Post he had copies of 10 Section 10.7 certificates, one of which was issued on November 7 to Ms Callaghan, which expressly stated the prohibition on residential development.

He said the DA had a complex history but the council would work hard to resolve the dilemma.

“We are very sympathetic to people who have paid money for properties and who were not correctly advised,” Mr Bennett said.

The council is bringing forward consideration of a planning proposal to rezone the land to residential. This will be considered at the December 18 meeting rather than in February.

But even then, any council recommendation must be approved by the NSW Department of Environment and Planning. Their assessment could take three months, taking any decision to March of April next year.

However there are no guarantees of approval given neighbours’ concerns about land use conflict. Light industrial businesses in the area have previously objected to the residential rezoning, fearing complaints about their operations.

“We’re negotiating a compromise between developers and business owners but I would fully expect at the next meeting that the businesses will say they don’t want the land rezoned,” Mr Bennett said.

A welding firm opposite has placed a ‘Buyer Beware’ sign on its fence, warning of 200 truck movements day and night.

The general manager said while councillors could endorse 17 internal lots for residential zoning, outside lots facing Robinson and Lansdowne Streets and closer to industries, were more contentious.

“Councillors will have to determine the appropriate line between industrial and residential,” he said.

Land developer of the past 40 years, Herb Schuster said he had DA approval for 17 lots on the old drive-in site.

“We paid the council $150,000 in contributions for infrastructure. They would not have issued the subdivision certificate if we didn’t comply,” he said.

“We didn’t go ahead and do the subdivision without approval. We’ve sold the land in a very legal way.”

Despite the planning proposal, Mr Schuster understood he and the council had agreement for residential use.

Both parties acknowledge the project’s complex history.

The land was zoned B6 in the council’s 2009 LEP. In 2011 Mr Schuster and Mr Makin secured approval for 17 housing lots and a single industrial block fronting Lansdowne and Robinson Streets. At that time the zone allowed residential, “but only as part of a mixed use development,” a December 20, 2016 report stated.

However, a 2012 LEP amendment removed residential altogether from any B6 zone, due to councillor concerns about land use conflict. The 17 lots had been started and enjoyed existing use rights but the change removed any possibility that houses could be built on them or that they could subdivide the adjoining larger block for homes. 

The developers objected and council planners initiated the current planning proposal to address the problem. It sought to alter the zoning from B6 to R5 large lot residential for those two land portions.

The report warned that if the planning proposal didn’t proceed, there was a risk that the council “may not be able to approve dwellings on lots that have been lawfully approved in the past” for that intention.

That planning proposal has been underway for two years.

The Post understands that while a 2016 DA modification acknowledged existing residential use rights, council planners removed these in a 2017 modification. 

Mr Schuster has also rejected land use conflict concerns, saying double glazed windows, which he himself had provided for numerous developments, including airports, would reduce noise impact.

He has also lodged a development application to build 20 residential lots in stage two on land previously pegged for light industrial. The block’s rezoning is also covered in the planning proposal.

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